December 16, 2008
LONDON, Dec 15 (Reuters) – Hedge fund trade association the Alternative Investment Management Association (Aima) called on Monday for restitution for investors caught out by an alleged $50 billion fraud at New York hedge fund firm Madoff Securities.
“Clearly, lessons must be learned, restitution must be secured for investors, and processes/safeguards must be improved to prevent such a situation recurring,” said a spokesman for the association, which is based in London but has 1,280 members worldwide.
A growing list of the world’s big banks and financial institutions including Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), France’s Natixis and Japan’s Nomura (8604.T: Quote, Profile, Research, Stock Buzz) have been lining up to acknowledge multimillion dollar exposure to Madoff funds.
Bernard Madoff was arrested and charged on Thursday with allegedly running a $50 billion “Ponzi scheme” in what may rank among the biggest fraud cases ever. A Ponzi scheme pays profits to early investors from money received from later entrants and needs an accelerating stream of new investors to keep running.
Aima, alongside its U.S.-based counterpart the Managed Funds Association (MFA), has been at the forefront of hedge fund industry efforts to devise a voluntary code of conduct to head off an expected increase in regulation.
This article was posted: Tuesday, December 16, 2008 at 11:11 am